Distribution Network - Department Stores

An Expert's View about Business Administration in China

Last updated: 22 Feb 2011

Develop Distribution Networks Through Department Stores

6-1 Entry Models for Products

There are mainly three entry models:
→ special counters (store within store)
→ buy-out
→ consignment

6-2 Procedures for Making Purchasing Decisions

1.Information on the manufacturers, their products and brands, promotional brochures and market information are provided to department stores by the manufacturers or their sales personnel.

2.The department stores' merchandisers collate such information and compile reports for discussion and decision-making by managers in weekly business meetings. After the selection process, department managers or their representatives will negotiate with the manufacturers on the terms of cooperation.

3.After the terms of cooperation have been agreed upon by the business department, the cooperation plan will be passed to the deputy general manager for approval. Arrangements will then be made on product entry and setting up sales counters.

6-3 Points to Note for Suppliers Applying for Entry

1. Suppliers should provide samples of goods.
2. Suppliers should provide the following documents for the checking of:

(1) Supplier's operation (distribution) right: the corporate entity business licence, corporation code certificate, tax registration certificate, production licence, health licence, authorisation letter, product distribution licence, special-purpose commodities licence, imported goods tariffs bill, domestic sale licence for branded products processed with supplied materials, and VAT general taxpayer qualification certificate for suppliers who are general taxpayers.

(2) Product quality: the quality inspection certificate; CCC certification; QS certification; inspection certificate for imported goods, drugs, animals and plants; and GMP certification and state approval certification for drugs.

(3) Product labelling: trademark; patent; quality certification; patent certificate number; information on the product's ingredients and their proportions; product manual and user instructions; warning signs for dangerous, banned or use-with-care products; and certificates and warranties for after-sale services.

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Posted: 21 February 2011, last updated 22 February 2011

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